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The Draghi Show

Published Friday, October 23rd, 2015

So much for non-events. Those who had expected the latest ECB monetary policy update to be a muted affair were caught short after Mario Draghi paved the way for additional stimulus in the face of meek economic growth and falling consumer prices. His typically dovish stance inched to a fresh high as he all but guaranteed an extension of the ECB’s asset-buying programme come December and even hinted at a potential rate cut from already record low levels.

Investors were quick to absorb his comments which injected much needed fizz into what has been relatively subdued equity markets while the bloc’s sovereign debt yields came crashing lower and the euro plummeted. The fallout from the prospect of further ECB easing was far reaching with the risk-on environment mirrored in the US where stocks took their cues from the rally on European bourses. Another batch of upbeat corporate results also contributed to the close to 2% bounce on Wall St as did solid housing data revealing sales of existing US homes in September rose by a forecast-beating 4.7% on the year.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.